What Will Cause The Next Financial Meltdown? | Sam Burns
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- Опубліковано 22 лип 2024
- Sam Burns, Chief Market Strategist of Mill Street Research, discusses his outlook for the economy and financial markets for the remainder of the year.
*This video was recorded on August 28, 2023
FOLLOW SAM BURNS:
Mill Street Research: www.millstreetresearch.com/
Twitter (@MillStResearch): / millstresearch
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For business inquiries, reach me at david@thedavidlinreport.com
*This video is not financial advice. The channel is not responsible for the performance of sponsors and affiliates.
0:00 - Intro
1:00 - Stock market outlook
3:40 - Overweight sectors
4:33 - Real estate
6:00 - Soft landing
8:30 - Fiscal vs monetary policies
10:10 - Cost of borrowing
13:20 - U.S. real wages
14:50 - Job market
16:00 - Bankruptcies
20:40 - China
22:30 - Interest rate
26:50 - Consumption
28:40 - Inflation
30:15 - Fed pivot
25:25 - Recession outlook
36:38 - New all-time highs
37:30 - Underweight sectors
39:00 - What would make Sam bearish?
#investing #economy #stocks
Do you think stocks will hit an all-time high this year? Comment below and don't forget to subsribe!
FOLLOW SAM BURNS:
Mill Street Research: www.millstreetresearch.com/
Twitter (@MillStResearch): twitter.com/MillStResearch
The Dow peaked 3 weeks ago. Auto repos and foreclosures are rising, credit card debt over $1 trillion and commercial real estate are the obvious negatives, but those mostly affect the poor and the middle class. But they never bring us into a recession. It's when the upper middle class begins hurting and begins cutting back, that we always have a recession. Many nice suburbs are now seeing price changes lower for the first time; an indication the upper middle class is cutting back. October will see a major slide in the stock market. You have an excellent show
😊😊😊😊😊
I haven’t sold off any of my equities, but all of my new investment money is going into variable rate savings products such as short term treasuries, high interest savings and some 1 year GICs. It’s my way of hedging my bet, since I don’t know what’s going to happen. Right now allocation is roughly 55% common equities, 20% prefs, 10% PMs, 10% short term cash equivalents, 5% long term bonds (which is the area where I am waiting and looking for an entry point to buy more and balance out my portfolio).
Ask we wi hand jam your money over -
I'm confused, isn't he essentially arguing that interest rates have no impact on supply and demand? He claims that interest paid here is income gained there, ergo spending is unaffected. But wouldn't that imply the fed is playing with buttons connected to nothing? Sounds off to me.
This guy got lucky on this year’s call , next year will be a deep recession and unemployment reaching 7%
Liquidity trap. Yes ... earned interest is stimulative, but interest paid is only a benefit for those that HAVE savings. This is asymmetric given the lack of savings in the USA. The main issue are those that have to continue rolling over debt in a rising rate environment. I'm fairly convinced that the fed MUST keep short-term interest rates high as inflation is stickly. Monetary deflation / destruction will increase as debtors go bankrupt ... both personal and corporate debtors. This is doubly true for those that are heavily indebted in the Eurodollar market. Hence, the flight to the US dollar remains strong. Just ask yourself why long bonds continue to lag short term bonds?
👍Sam was correct in his 'contrarian' call -- to buy tech stocks -- from around last Christmas time; (but his positive all-time-highs take still continues to scare me.)👍
Anyone ever notice how none of these guys want to mention that the only reason the stock market is up is because the FED came in and bailed out the banks in March and told everyone don't worry, everything is safe. After that the markets went insane and that's why the markets are up
This guy might have been right about the direction of the stock market, but he's way off (living in a bubble somewhere ?) on the economy.
He was out of touch during the prior interview and he's still out of touch now. Maybe the market will bite him in the backside when it reverts back to reflecting reality... say around mid-late October when Q3 earnings come out.
This guy lives on another planet.
Everything's heading Downhill at this point. Recession will hit within 6 months. And it will be rough.
Loving your content David! Any chance you could say the date the interview was filmed during your introductions?
Thanks! The film date is in the upper right hand side of the screen in the very opening. It’s also in the video description. Cheers
@@TheDavidLinReport thank you for the response, and I appreciate that, I listen while driving, I listen to you during my commute 45 minutes back-and-forth to my office, that’s only reason why I asked, almost every other Contant creator says what day they’re talking to this person because people listen if they don’t always watch but cheers to you too. Thanks for responding to keep up the good work.
Odd to mention jobs here, I thought all the "growth" is in extra part time jobs, plenty of full time lay offs. This is recessionary surely. And along with credit cards up to the max, shows demand can only go down.
This guy is great. Just a few take aways: (1) We have seen general disinflation. Nope, inflation increased just last month and then he goes on to say that there is no worry about the Treasury going bankrupt because they will just print money to pay the debt and the bond interest, wherein he acknowledges that some will benefit from the increase in interest, but doesn't fully acknowledge the effect that will have on increasing inflation, resulting in the fed continuing and perhaps increasing rates and the cycle goes on and on (2) The Chinese market is down but no crisis yet. Nope, there is definitely a crisis and the system is currently collapsing. (3) The banking sector is fine and healthy. Nope, we see cracks in regional banks everywhere and this is just the beginning of credit tightening. (4) We are seeing corporations doing well and remaining strong. Nope, we just saw 64 corporate bankruptcies in one month, topping the total for 2021. I mean, was he correct in anything he said???
Great interview David, very informative...well done
This guy seems very sharp
Appreciated his insights. Both of you
14:01 don’t know where they see spending … all around me we are trying to lower our costs and stopped going to restaurant as much as we can .
100% agree we used to eat out twice a week now it’s once every 2 weeks and cutting back on expensive shampoos. Things are getting tight and both my wife and I make decent money.
@@waynekirshner7155imagine. I am only an artisan and wife nurse . And kid. Tbh: we really see only Darkness.
I visited Orlando last week, The Olive Garden restaurant was empty dinner time and I remember long waits before, waiter said demand fell off the cliff month ago, maybe we're reaching tipping point
Who still eats out?? I stopped at covid and haven't went back once inflation hit. Bought a chest freezer and so far have been keeping it filled with amazing sales. Just fed me and 2 boys 3 T-bone steaks and hutterite sweet corn on cob for $20. Been eating like that since covid. Have tons of really good burger all for under $3 a pound as well. We all love cereal and if patient have kept at least 20 boxes of fun cereal kids like for under $2 a box. No coffee shops, even quit smoking over price 1.5 years ago. No bars or casinos. No car payment either. Just saving cash as much as possible with rent going up $600 in 3 years.
Thanks guys 🙏🏼 I am only half way listening but it seems that the systems is still doing its job: the wealthy become wealthier simply because the cost/yield of money and the poor dont have excess money.
Very interesting discussion. Interesting with new perspectives. Thanks David.👍🙂
Great information...thanks David.
Do earnings estimates for next year ever “hold”?
People highly underestimate the power of the 2T in govt spending being bankrolled and the ramifications have yet to be revealed over the near term The debt clock grinding higher and higher. With ever increasing pressure due to the slow grind of the debt being reset the next 2 years. Eating more and more of the fiscal budget
I take screenshots of the debt clock every once and a while just to see the acceleration. It is out of control. I think it is to late in the game for them to do anything to stop the inevitable.
Most of the world expects it won't be repaid. Don't even bother. The problem is what happens now.
Exactly.
ThisMoron actually believes that senile ole joe and the demcorats' Bribemnomics and their abysmal and criminal fiscal policies,...
their continuing to unnecessarily spend 50% MORE in 2021, 22, 23, 24,..
(all of it deficit spending on far left wacko donor paybacks and vote buying pork,...
(as he says, "the government is better at picking where to apply capital than the free market" from his demcorats stealing from tax payers and deficit spending is "better than giving tax credits to tax payers to decide where to apply that capital),...,..
....adding trillions to tax payer debt each year),...
years after the pandemic is over,.... than was spent the year before the pandemic started,.....
the very thing that sent inflation to 40 year record highs will actually not only grow the economy, but spending tax payer dollars on inefficient windmills, solar panels,. and unicorn pixie dust. while shutting down abundant cheap extremely more energy dense energy sources,.. will make the economy more productive,.. AAAAAAAAND,.. wait for it,...
REDUCE INFLATION.
And all of this inflationary fiscal abuse is diametrically opposed to the few demand side tools the Fed has to fight the inflation that was caused by this fiscal abuse.
Are youphecking kidding me?????
When about a half the debt rolls over in the next year or so,.... 25 to 33% of the US tax receipts will go to pay interest on the debt.
Howphecking productive and inflation reducing is that,.. when the government has to issue more debt just to pay off the interest on the debt that keeps accumulating exponentially each year.
Welcome to the new Venezuela if not worse.
@@kenlen8029
Neither do Americans care until it eats the fiscal budget from within as the interest hollows out the fiscal budget and soon all those programs will be cut and Americans standard of living gradually declines. maybe don’t think they are going to get paid back. They soon will realize that what they getting in return for their risk/ investment is going to return less and less. The dollar purchase power getting hollowed out
love the show
Every crash has the "complacency" stage. This bubble crash is no different.
Great comment
I’m really do not understand, can you help me understand this dept situation we have and Japan,too. 27:50 printed the money and bond , now we are paying intrest to WHOM????? Who does Japan paying intrest to whom????????
They call me Mr. poopy pants!!
💩 👖 🎉
Higher interest rates is actually hurting people holding bonds as bond prices go down as interest rates go up. It's only people having cash in the bank or people investing in bonds now who are benefiting from higher rates
I am getting a bigger buttload of cash to sit on, so that I can get more interest payments to go into my pocket. 🙃🤣
I don't know who to trust on the economy. Everyone seems to cherry pick indicators to support their thesis.
I can't thank you enough for the great content of your episodes. Great guest!
I can’t thank you enough for tuning in!
thanks again David! When more people say no landing or soft landing is when recession is more likely to happen and it comes crashing down eventually. Of course the "when" is always a surprise. Just like 2000 and 2008. History doesn't repeat but it does rhyme. I suppose time will tell. Stay positive whichever way the market goes and prepare regardless!
When is the hardest part. Timing is everything
If economic conditions remain good, I don't see how inflation goes down or why the Fed should pivot. Pivoting too quickly could allow inflation to flare up again. The Fed austerity is a blunt instrument that is meant to create higher unemployment. Historically, it does not turn out well for the economy when the lag effect catches up. Burns is clearly in the soft landing camp
Yes but the fiscal policies are not truly taken into account in your assessment imo
@@brainkill7034 The Fed recognizes that the government's runaway spending works against the Fed's efforts to control inflation. Thus, the Fed is not going to pivot prematurely knowing that a catalyst for inflation still exists. Historically, a pivot only occurs after an accident has occurred. In the end, fiscal policies are delaying the inevitable.
You have to remember that Fed.gov is pumping trillions into the economy. Without the continued stimulus, GDP would be negative. The only question is how long it can continue before the 10 yr hits 5% and above
That was a very reasonable case for a positive outlook. Definitely reevaluating some of my pessimism.
Fundamentals Smundamentals Markets will rollover this fall.
Market is going to keep going up forever until it doesn’t. It’s gonna be ugly when retail keeps trying to long it and it keeps falling.
It always recovers though.
better put, what is the next trigger for next round of $$$$ printing?
Someone who knows what he’s talking about. Good interview ⚡️
how is sam related to mr burns of the simpsons?
@8:45 "The trajectory of inflation is lower."
@25:00 Contradicts his earlier statement and literally makes the case for HIGHER inflation.
13:00 higher mortgage but higher rates earned as well. Interesting 17:15 spending shifting from goods to services; shipping and trucking down 24:50 High Treasury rates mean more money to spend for people, but wealthy people spend at a lower rate
Which means money velocity slows
Trigger? Student loan payments restart. Fuse is lit!
Trigger is unemployment rate rising above 4%.
First sign of real trouble and Powell is absorbed back into his vulva?
Nice misogynist / sexist comment there.
Is that ben cowens older brother?
Thank you gentlemen 👍
Credit bubble leading to bank’s collapsing is my prediction
Another great show David.
Thanks for watching!
1) I can't buy argument that higher interest rates support spending, because interest payments are going back to economy and increase some people earnings. It would make sense, but who actually are major debt buyers - large institutions, who also has to make profit. Lets not forget about non domestical debt holders - China, Japan etc. Lot of interest payments are moving out of country
2) Until job market stays strong, cant see major pivot, because it leaves more spending power into economy and has positive inflation impact. What fed really is after, is breaking the stock market and halt job market
3) one of my favourite quotes - Charlie Munger: "nobody" throughout the history has ever gotten away with money printing
Its starting to sound like the bulls are slapping themselves on the backs rather than actually believe anything!
Underrated comment
The financial storm is upon. Hard to see it when we’re in the eye of the storm.
I love this 😍
What the Government effectively did was front run the recession with recession levels of spending in the hopes that it would lead to a soft landing.
What happens when and if the economy goes into recession despite these levels of spending.
good job david breaking question down and explaining how bonds work. specially people like me dont understand how it works. keep up the good work👍
BINGO!
@23:45
......and how many Americans own these assets?
And does anyone know what triggered the French Revolution?
Don't underestimate recession this year
You have been overestimating it all year it sounds like lol!
We are in one right now. I think what you meant was “depression”
A recession for some
A depression for others
Good times for the wealthiest
Most people are getting a 22 30% raise that is the cost of most everything going up from food gas and utilities. Which means people's banks accounts are dwindling. Mortgages are going up because the mortgage rate is going up the prices have not come down enough to reflect the high interest rate which means there's going to be coming an endpoint where nobody can afford anything and not even rent. If the economy is doing so well why is the household debt on credit cards upwards over 1 trillion dollars
“We sell them more than they buy from us”🤔
Clearly not what he meant to say.
What will happen if the government stops spending a Trillion Dollars into the economy ?
Don't worry Biden will save us.
David, another great report. Do seek out Michael Pento. A fire brand, with an uncanny accurate assessment of the Macro market. Cheers, Mate.
15,000 trucking companies are finished... that doesn't fit the government and Sam's thesis
I think what you guys are not realizing is that when people are talking about recession it's not immediate it takes about 18 months for it to kick in and so far we're at the 10-month marker so they say it's going to roll really gentle and then it's going to fall off a cliff you should maybe ask him about the yield curve how it has a over 90% rate of a recession once it on invert. These people are impatient to let things play out if you look at millions of charts it shows a massive recession not a soft Landing there is no such thing and not a non reception either
Look at the jobs number where they show high paying jobs versus low paying jobs. the high-paying jobs are leaving and people have to take up two to three jobs to make up for the one-paying job which means they are fluffing the numbers
One thing you guys haven't talked about yet is when the student loans go back into effect it's going to Halt the economy faster than you think on average people are going to start having to pay $400 a month there goes their discretionary spending
What we have here is a failure to communicate, 29, 08, 2020, premeditated financial Takedowns, "Never let a good crisis go to waist", remember
Great discussion!
Lin giving numerous points on worsening economy: China slowing down, debt service cost > trillion, credit card debt, high FED % and more. Burns: NAH, IT'LL BE FOINE. xD
Has this man been to his local retail area or mall? I would say that area is NOT doing well..way too many empty locations. It use to be as soon as a lease ended and a retail location moved out a new one moved in. Not anymore. What you see with your eyes doesn’t match up to what you are hearing
Definitely appreciate you David. Glad your able to get the many diverse outlooks from your guests, but you can definitely tell Sam Burns spends his time in an office reading charts. He is way off if one would consider what it looks like out here in the blue color service industry. I didn't hear one point he made from his perspective I could agree with. I live in south central Virginia. Thanks
I am seeing and experiencing financial hardship as more of a "death by a thousand cuts." Time alone will bring the meltdown. The vast majority of our population is not concerned about the ups and downs of the markets; they just know their wells are drying up.
Well said. I think those guests are just too rich…😂
they do speak with a certain confidence and air !@@ikust007
Retail big bear vs wall street paper bull
Always keeps my attention Dave. Thanks!
You have a bear as a guest but your title is “what will cause the next financial meltdown”?! That makes sense..😕
This guy sounds like he's discovered the "virtuous cycle" of high interest rates and fiscal damnation.
I’d love to see a cage fight Sam Burns and Luke Gromen or David Rosenberg! An intellectual one, of course.
Gong! 👨🦯
Easy to say all these things when the market is up 22%, now 17% this year. See if he says the same thing once stocks retreats, credit card debt is all time high, unemployment rockets up, people foreclose, etc. This was just an over extended bear market rally.
No consideration for stagflation? {sigh}
All the FED cares about is selling treasury notes for the treasury can imcrease the debt by creating money
We will be in a severe recession by beginning of second quarter 2024. The consumer has maxed out credit cards, student loan payments are resuming. Car lots are full and consumers can’t afford cars or buying homes. Unemployment rate will go up to 7% . Stock market will take a dive.
Be prepared and stay very liquid
What if the Government announce another stimulus package? 1.5 Trillions to support the economy. No recession, another bull run.
@@walden6272hey ya just keep printing. What could go wrong?
The biggest the stock bubble the tinier the needle needs to pop it
Good interview and a very competent interviewee.
True. Technically The Treasury can't go "bankrupt". Why? They can print money.
Awesome! I'm getting 2% more yield on my Bonds, but inflation is 4% and by printing money, I am assured a guaranteed loss!
Short TLT/Long TBT. Use both hands, all day, everyday.
Under no circumstance whatsoever should you be holding USTs.
Who’s going to buy the debt? Usually it would be other countries but dedollarisation is a reality.
@@freespeechmatters583 The Fed will be the buyer of last resort. We're getting closer...
@@wagashimanju The fed is just a private bank and it passes assets onto other institutions right? So it can only go so far before Congress etc can step in and make it stop. Out of control QE always results in higher CPI in the end.
@@freespeechmatters583 In the midst of a Global financial meltdown, caused in part by the collapse of The US Bond Market, who in Congress is going to step up and say "no Jerome, you can't create more money and destroy the Dollar by purchasing our own debt anymore."? Anyone?
?? Did the bald guy live through the GFC ?? If so, then he is selling ice to an Eskimo.
Eeeeexcellent.
??? Wot
With interest on the debt surpassing defence spending and coming in 3rd to SSN and Medicare.The goverment has proven it will not allow a bad recession unless inflation comes roaring back hard or the dollar becomes worthless not a likely senero compared to other countries fiscal state.
Hilarious
is it forbidden to discuss the Ukraine War and Russia sanctions.
Yes
Highest outflows of banks in history highest credit card debt in history highest cost to own a home in history this guys is unattached from reality
What about ESG ?
Would be nice to see you cover it.
Environment, social and governance 🙂
And the environment damage the Ukraine war caused.
World War 3
There’s always a financial reset after a war. CBDCs will be the panacea offered after the next crash. Mark my words.
The stock market is not the economy.
Sam will be wrong about the market going up. It's going down in the next couple of months!! What will his excuse be then???
So when he says consumer is strong and keep on spending will keep the economy elevated, has he seen the credit card borrowing charts.
This guy sounds like an apologist for the current administration's politically driven fiscal largess. Many commentators have stated that 2 trillion of deficit is stimulative and is working at cross purposes to the Fed's raising rates to bring down inflation. This fellow is saying, hey, but that's OK as long it results in people keeping their jobs and improvements in infrastructure to drive productivity. Meanwhile, government tax revenues are declining and the interest on the debt keeps climbing, and keeps rising as a result of the current admin's spending. To finance that debt, another 2T of issuance will need to happen by year's end. China won't be buying, the Fed certainly can't right now and domestic banks definitely won't, so who will? This will only lead to higher and higher yields, which aren't sustainable. Sam also said that the fiscal stim could disappear depending on what happens with the politics in 24, which was a not so subtle dig against a GOP House trying to force more responsible fiscal policy. Maybe I'm looking at this through too much of a political lens, but this guy's implied thesis that current inflation was all supply shock driven is crap. The Fed will be lucky to see 4.5% core PCE by the end of this year.
Another great interview on The David Lin Report!
Well, I project that markets will re-test previous recent lows at some time. From there I'll trade the technicals up or down. All the same to me. I think that these markets command a cautionary trading method. Let it come to you.
Wow, first positive report. I suppose rhe collapse of Chinese debt on thw rest of the qorld wont be that bad?..every other forecast is recession after Christmas..we live in hope from this one forcast.
Sam Burns has nailed it. The bears can’t believe his soft landing thesis. Now everyone (including me) is on board with the probability of near term fair weather, the bears may finally have their moment. David, nice try poking holes in Sams thesis.
Sam Burns has nailed being an MMT cult member.
ThisMoron actually believes that senile ole joe and the demcorats' Bribemnomics and their abysmal and criminal fiscal policies,...
their continuing to unnecessarily spend 50% MORE in 2021, 22, 23, 24,..
(all of it deficit spending on far left wacko donor paybacks and vote buying pork,...
(as he says, "the government is better at picking where to apply capital than the free market" from his demcorats stealing from tax payers and deficit spending is "better than giving tax credits to tax payers to decide where to apply that capital),...,..
....adding trillions to tax payer debt each year),...
years after the pandemic is over,.... than was spent the year before the pandemic started,.....
the very thing that sent inflation to 40 year record highs will actually not only grow the economy, but spending tax payer dollars on inefficient windmills, solar panels,. and unicorn pixie dust. while shutting down abundant cheap extremely more energy dense energy sources,.. will make the economy more productive,.. AAAAAAAAND,.. wait for it,...
REDUCE INFLATION.
And all of this inflationary fiscal abuse is diametrically opposed to the few demand side tools the Fed has to fight the inflation that was caused by this fiscal abuse.
Are youphecking kidding me?????
When about a half the debt rolls over in the next year or so,.... 25 to 33% of the US tax receipts will go to pay interest on the debt.
Howphecking productive and inflation reducing is that,.. when the government has to issue more debt just to pay off the interest on the debt that keeps accumulating exponentially each year.
Welcome to the new Venezuela if not worse.
If by a soft landing you mean no one can afford rent. Afford food, afford insurance, afford taxes, afford basic life. Sure it's gonna be a super soft landing.
Insane, creepy, false ads accompany your interviews. FYI
I was very bearish... until I heard Harry Dent say a crash was imminent. Since is is ALWAYS wrong, i began to suspect that the economy was far stronger than i had assumed!
Harry is a perma-bear, but remember a broken clock is still correct twice a day.
Harry is a character, but i must say, a lot of the predictions he was "yelling" about years ago are actually happening for real, not sure if you've read his book Zero Hour, its actually quiet impressive, especially the accuracy of the emerging markets forecasts
Good ol' Harry. Another guy getting crushed in his Long TLT position.
When do you sleep bro 🤷🏼♂️
technical wise market looks like doing a double top? and like 2006 when fed funds hit 5.25% peak, we have 5.5% peak now for end of 1H2023. so likely history repeats and we will likely see rising unemployment and bursting of the everything bubble beginning 1H2024 much like what happened in 2007 where the fed then had to start lowering rates.
Everything is rosey nothing to see